PM Announces Electricity Subsidy for Low-Income Households

Prime Minister Shehbaz Sharif announced on Tuesday that the government will not increase electricity rates for protected consumers using up to 200 units of power for the next three months. This decision aims to provide relief amidst rising energy costs and public discontent.

Subsidy Details: The subsidy, effective for July, August, and September, will support households consuming up to 200 units of electricity, costing the national exchequer Rs50 billion.

Consumer Impact: This move benefits 94% of electricity consumers, covering those who use minimal electricity, thereby cushioning them from recent tariff hikes.

Funding Source: The subsidy will be financed through the development fund of the current budget, addressing the immediate needs of lower-income households.

The announcement follows public backlash against the government’s prior decision to significantly increase electricity tariffs as a condition to secure a loan from the International Monetary Fund (IMF). This increase had placed additional financial strain on the salaried class, already burdened by the new budget measures.

Prime Minister Sharif emphasized the coalition government’s dedication to overcoming economic challenges and reducing corruption. He assured that the decision was made to provide immediate relief to the common man during the peak summer months, which typically see higher electricity consumption.

Despite the subsidy, the government previously implemented substantial tariff increases for both protected and unprotected consumers, effective from July 1, 2024:

• Protected Consumers:
  • 1-100 units: Increased by Rs3.95 per unit (from Rs7.74 to Rs11.69)
  • 101-200 units: Increased by Rs4.10 per unit (from Rs10.06 to Rs14.16)
• Unprotected Consumers:
  • 1-100 units: Increased by Rs7.11 per unit (from Rs16.48 to Rs23.59)
  • 101-200 units: Increased by Rs7.15 per unit (from Rs22.95 to Rs30.10)
  • 201-300 units: Increased by Rs7.12 per unit (from Rs27.14 to Rs34.26)
  • 301-400 units: Increased by Rs7.12 per unit (from Rs32.03 to Rs39.15)
  • 401-500 units: Increased by Rs6.12 per unit (from Rs35.24 to Rs41.36)
  • 501-600 units: Increased by Rs6.12 per unit (from Rs36.66 to Rs42.78)
  • 601-700 units: Increased by Rs6.12 per unit (from Rs37.80 to Rs43.92)
  • Above 700 units: Increased by Rs6.12 per unit (from Rs42.72 to Rs48.84)

The temporary subsidy aims to alleviate some of the financial pressures faced by low-income households during the hottest months of the year. The government hopes this measure will provide much-needed relief and improve affordability for electricity consumers across Pakistan.